Paraxylene buyers, sellers and traders in Europe all say they haven't seen a second settlement agreed at the same level as the initial contract price a week and a half ago, which would fully settle the contract.
On February 3, the PX contract for February was initially settled at Eur1,232/mt ($1,615/mt) FD Northwest Europe, between producer Shell and consumer Invista, a source at Invista said. The settlement was an increase of Eur102/mt from the January settlement. A source at Shell declined to comment on it at the time.
Last week, a source at Oxxynova reported following the initial settlement with Shell, but said his other supplier would not confirm the Eur1,232/mt FD NWE level. Tuesday, the Oxxynova source said there had been no change from last week and he had not heard of a second producer agreeing to settle.
The PX contract isn't considered fully settled until two independent producers and two independent consumers agree to settle at the same level.
One producer said he had not settled yet, and he also did not know of any other PX producer who has followed. He went on to say that it is possible that the PX contract price will not fully settle this month and contract parties will have to use the fallback mechanism specified in their contracts.
One PX trader said Tuesday he believes the contract price will settle eventually.
A major PX consumer said Tuesday that the contract situation is very unclear. The buyer said while he does have a contingency plan in his PX contracts.
"This to me is not satisfactory and I hope that along the way we do get a settlement and can therefore progress," he said.
The PX contract process operates differently in Asia than it does in Europe. In Asia, producers openly nominate their contract numbers and have a deadline by which they must agree a monthly contract price for the contract price to be valid. In Europe, there is not a formal nomination process before negotiating begins and there is no set deadline by which contracts must be agreed to be valid.
